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Providers vie for a piece of business protection pie

In protection this week, after being severely neglected by many providers and advisers for sometime, the business protection market is getting some attention.

Aegon Scottish Equitable, the biggest player in the market, will have to budge up as other providers, such as Bright Grey and Legal & General, start to muscle in.

Bright Grey is currently developing a range of products, such as key person and executive cover, partnership insurance and share protection, which it will phase in from this autumn.

Aegon has recently been touring Britain educating advisers on the merits of business protection and Bright Grey plans to follow in its footsteps with seminars and training in the pipeline for early next year.

L&G has a low key presence in the market but is in the process of boosting its business protection proposition and Axa are looking into this as well.

According to Swiss Re the UK has a mammoth £275bn gap in business protection, in addition to the well-publicised £2.3tn personal protection gap, so the spotlight on this area can only be good news.

Aegon Scottish Equitable head of individual protection sales Mark Meads says advisers are shying away from this market because they are daunted by large sums assured and taxing underwriting and generally perceive it to be overly complicated. But he says they are missing out on a very lucrative opportunity.

Bright Grey corporate protection sales manager Jerry Bayman warns advisers may be accused of negligence in the future if they continue to ignore the corporate market. He says: “If a company’s key person falls dead and the business suffers, I can see the company suing the advisers for not plugging that gap.”

Something else attracting attention this week is the buying without advice section the FSA recently added to its consumer website moneymadeclear.

The section warns consumers that, if they do not seek advice, they have less grounds for complaint if the protection product they purchase is unsuitable and Lifesearch head of protection strategy Kevin Carr is hoping this may be a taste of what’s to come in the regulator’s Icob report, out for consultation in June.

Carr says: “We are very pleased that FSA has deemed it necessary to inform the readers of its website of the potential pitfalls associated with buying insurance without advice, and we hope that this is an indication of what we can expect from its forthcoming Icob review.”

If you have any protection-related news or views please don’t hesitate to get in touch with me and stay tuned for next week’s edition.

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